About 125 people who sought asylum in Australia were in police custody on the Pacific island nation of Nauru after a riot ended with fire destroying most of the Australian-run detention centre there, an official said on Sunday.

The blaze on Friday evening destroyed all the accommodation blocks, medical facilities and offices and caused damage worth an estimated A$60m (£36m/US$55m), the immigration department said. Only the dining and recreation buildings survived.

The department could not say how many detainees had been charged. The Nauru police commissioner, Richard Britten, did not immediately return a phone call on Sunday.

The remaining 420 asylum seekers had been transferred to tents at a second detention camp under construction on another part of the tiny atoll, which is home to fewer than 10,000 people, the spokeswoman said.

Eight asylum seekers received hospital treatment following the riot in which protesters hurled rocks at guards and police armed with batons and shields.

Clint Deidenang, a resident who witnessed the hour-long riot from the camp fence, told Australian Broadcasting Corporation radio on Saturday that up to 1,000 local Nauruan men carrying machetes and steel pipes arrived to help police prevent the asylum seekers breaking out. Deidenag described it as the biggest riot he had ever seen on the island.

Australia pays Nauru and Papua New Guinea to hold asylum seekers who attempt to reach the Australian shore by boat. Their asylum claims are assessed at the island detention camps.

The Australian government has announced that effective from last Friday all refugees who come by boat to Australia will instead be permanently settled in Papua New Guinea, a national of 7 million mostly subsistence farmers.

Ian Rintoul, co-ordinator of Australia's Refugee Action Coalition advocacy group, said asylum seekers could no longer be adequately cared for on Nauru because of the fire and should be brought to Australia. Rintoul said Friday's protest about the time taken to process asylum claims had been planned throughout last week. The fire had not been planned, he said.

"The Friday night protest was planned to be a breakout and march to the airport then back to the detention centre," Rintoul said. "What seems to have happened is that there has been far more resistance than had been expected."

Most of the protesters were Iranian, Palestinian, Lebanese and Iraqi, he said.